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Do you remember when the top investors and tech companies reacted to every step of SoftBank? These days we are browsing the latest results from the Japanese conglomerate and its vision fund to see how something went wrong and where it is still successful with its startup portfolio.
First, this fund doesn't seem to have any additional money, as Arman Tabatabai and Danny Crichton found buried in the footnotes of his new regulatory filings. In the meantime, theinformationsuperhighway's losses have piled up:
The Vision Fund officially lost $ 17.4 billion in value for the fiscal year ended March 31, according to SoftBank financial data. In the previous year, SoftBank had a positive $ 12.8 billion increase in Vision Fund value, which meant the damage to this year's performance completely wiped out all the profits the fund had made in the previous year. The real shock, however, is the performance of the fund's underlying portfolio companies. The Vision Fund currently has 88 active portfolio companies that have not left the company. Of these, 19 investments saw total value growth of $ 3.4 billion, according to SoftBank, while 50 companies lost $ 20.7 billion in total. 19 portfolio companies remained unchanged in value.
Is it worse than what the rest of the market is going through overall? Here is Alex Wilhelm's view of Extra Crunch:
To a certain extent, this feels counter-narrative. Tech stocks have recovered in the past few weeks and the mood in the industry has rebounded – perhaps the COVID 19 downturn will not be as bad as you think. The results of the SoftBank Vision Fund paint a more negative picture of the economy: it is bad in many areas, many companies are affected and the value of many unicorns is too high, even if the extent of the write-downs that private investors such as venture capitalists will have to endure not clear yet. The private market can therefore expect a series of downward turns if unicorns have to raise capital in the short term. And many will. So the Vision Fund testimony is an indication that business software works as well as we might have thought, that there are some winners in health technology and that, with these exceptions, the rule seems to be a downturn in the home country.
Emphasis from me. Arman and Danny also broke out Arm's financial data for EC and what the top SoftBank company shows about the future of semiconductors. And for clarification as well as entertainment, they commented on SoftBank's detailed and sometimes bizarre presentation of the results.
The symbolism of the resignation of Jack Ma & # 39; s SoftBank board
Masayoshi Son made a name for himself in the 1990s with a pioneering bet on a very young Alibaba. Since then, he and SoftBank have had much of their net worth and stature in the success of Jack Ma & # 39; s efforts. Ma in turn strengthened SoftBank by holding a board seat in the conglomerate since 2008. After 14 years and largely changing interests on both sides, it is not surprising that he resigned. But as Danny wrote for theinformationsuperhighway in a helpful sidebar on other softbank reporting:
(I) It's not just a matter of an investor and his entrepreneur breaking some ties after two decades of doing business together. It is about the fraying globalization that triggered the first wave of technology companies – that a Japanese conglomerate with great interests in the USA and Europe could invest in a startup in Hong Kong / China and generate enormous profits. This tech world and the gap between the Internet and world markets continue unabated.
What will save college town startup hubs?
Few living people remember it, but Palo Alto used to be considered far from San Francisco. However, this was when Stanford University was actually a farm. The interaction of the university's technical research and education with local technologists was crucial to the emergence of Silicon Valley and the growth of the region. Over the past few decades, many other metros of all sizes have implemented their own successful versions of this game book.
But maybe pandemic effects are causing startup activity to be limited to the largest startup hubs? In this week's employee survey (a new format we're trying out), Danny believes this is the case. University income is overly impacted by the loss of foreign tuition fees, less domestic participation due to closed locations, student financial problems, etc. Natasha Mascarenhas looks back on her own experiences and finds the personal experiences so irreplaceable that she believes that the number of visitors will recover. Alex agrees.
When I move from the Bay Area to a university town this weekend, I think I disagree with all of this. Yes, I also expect higher education to be added – but what is left? State and private funds are already available in MINT programs and can extend into the future over many years. These schools have wealthy, supportive alumni and can generate revenue from commercialization (also known as start-ups). This means that the research laboratories as well as the country's (and the world's) scientific and technical programs will continue to function, just about anything that physically exists anywhere in higher education. The technology companies, which are still booming publicly or privately, need to hire more graduates with these degrees. Even with distance learning, the core institutions and their surroundings will have the means to continue and be regular targets for technical talent.
Danny, these are the big cities that I think are going to be hit hardest, especially those with difficult local and state sources of income like here in California. People of all income levels have already fled from the largest cities due to the high prices. Now the pandemic is increasing that they can work remotely with little to no loss of productivity. Instead, commercial real estate, usually an important tax base for cities, is in free fall. Let's say you work in engineering, but you want to spend less and have more space and convenience. Yes, there are many suburbs and suburbs to move to – but those in the university city are among the most beautiful. Nobody is fleeing boulder now. But I bet a lot of people wish they could move there.
Combine all of this with the global networking tools that the tech industry has struggled to put together so far, and I think it will soon be as easy to find a co-founder and start a business as finding an online appointment . Why not find a nice garage in a sleepy university town like Bill Hewlett and David Packard not too long ago and settle for hardcore entrepreneurship? Find your co-founders and key employees from far and wide and enjoy the benefits of your alma mater's local network. Just make sure you have a good WiFi connection and an ergonomic workspace.
The demand for delivery robots is growing and creating human jobs
It turns out that automation still requires a lot of blood, sweat, and tears to function properly. Resident automotive expert Kirsten Korosec takes a look at how the sub-sector of delivery robots for autonomous vehicles has set up remote people to help delivery robots safely navigate the most difficult parts of a route when demand increases during the pandemic. Her main example of this detailed look at theinformationsuperhighway is a partnership between Postmates and a startup called Phantom Auto that focuses on AV tele-operations.
With Phantom Auto software, a Postmates fleet manager can monitor a robot thousands of miles away. The supervisor steps in to help the bot navigate the first and last 15 feet to a restaurant or the recipient, or when he needs help crossing a busy street.
These robot guides can be supported with different methods. The human teleoperator can provide input into the system as easily as thumbs up or thumbs down to help the bot make the right choice. The operator can also control, accelerate or slow down the bot in real time using a handheld remote control.
The teleoperation component of mobility continues to spread. It separately covered a scooter company in Atlanta that hires remote operators in Mexico City to deliver the vehicles to customers.
If you focus on these topics, you may also be interested in the other things that Kirsten is up to (if you are not already reading them). In addition to her regular reporting, she conducted surveys with mobility investors for extra crunch with Megan Rose Dickey. We published the first last week on the bigger impact of the pandemic on the sector. Kirsten also has a weekly free newsletter called The Station on the topic and its coverage, which you can read and subscribe here.
Interviewed investors on business software, cannabis
Pandemic or no, corporate investors won't stop being bullish, thank you. Resident company reporter Ron Miller caught up with top investors in space to see the first part of a series in the cloud that he expects. Here is a quote from the "Extra Crunch" article courtesy of Max Gazor of CRV.
It is perfectly clear that the cloud software markets are larger than most people expect. We continue to invest heavily there, as we have done in the past decade. In particular, the currently most exciting trend in the company is the development of low-code software. I am on the board of Airtable, where I managed Series A and Series B investments. So I see firsthand how this will work. We are approaching a future in which hundreds of millions of people will be authorized to develop software that meets their own requirements. Imagine the productivity and transformation that will unfold in the world! This is possibly one of the greatest market opportunities we have seen since cloud computing.
And now something completely different. Cannabis has become a serious semi-legal sector that few of us have concerns about, at least in this part of the world. It has tended to breed its own investors – many of whom Matt Burns caught up with for our second poll this week. The pandemic seems to have turned things around for the category, at least according to some. Here is Matt Hawkins from Entourage Effect Capital:
Cannabis went from illegal to essential in about two weeks – cannabis is now listed as an essential service right next to hospitals, doctors, grocery stores, gas stations, and fire departments. As we get closer to federal legalization, there is still a great need for research into the medical benefits of cannabis and many more ways to manufacture medicinal products derived from cannabis. There is a lot to discover in the long term.
In the course of the week
What to do if your VC writes down your start?
Why VCs say they're open to business even when they pause new business
GitLabs Remote Manager for Settings, Onboarding and Why Slack Isn't a Work Zone (Part 1)
Remote's GitLabs Leader on What People Are Going to Do Remote (Part 2)
Open the hood when Vroom logs on to IPO
The big reset
Work From Home is dead, long live Work From Anywhere
After the Luckin Coffee scandal, Nasdaq is ready to tighten the rules for IPO listings
How I Podcasts: Articles of Interest Avery Trufelman
Europe on Facebook: Pay taxes and respect our values - or we regulate
How to decrypt a data breach notification
All about theinformationsuperhighway
theinformationsuperhighway Disrupt 2020 is going virtual
Startup Battlefield becomes virtual with theinformationsuperhighway Disrupt 2020
The Roelof Botha from Sequoia Capital will disrupt this fall
Extra Crunch Live: Meet Verizon CEO Hans Vestberg for a live Q&A on May 26th at 2pm ET / 11am PT
Extra Crunch Live: Join Boxing CEO Aaron Levie on May 28th at 12:00 p.m. (PT) / 3:00 p.m. (ET) / 7:00 p.m. (GMT)
#EquityPod: The clubhouse proves that time is a flat circle
Hello and welcome back to Equity, theinformationsuperhighway's venture capitalized podcast, where we unpack the numbers behind the headlines.
First of all, a big thank you to everyone who took part in the stock survey. We greatly appreciated your notes and thoughts. The crew chews on what you said, and we'll feed the best feedback into show tweaks in the future.
Today we have Danny and Natasha as well as Chris and Alex back for our regular news dive. This week we had to leave Vroom IPO registration, Daniel's group project on The Future of Work and a hand wash startup (?) From Natasha to get to the biggest stories:
- Brex & # 39; $ 150 million donation: Natasha covered the last big round of corporate card giant Brex. The party is over in Silicon Valley for a while, so Brex is lowering your favorite start-up's credit limit as it piles up cash for the downturn.
- Spruce is collecting a Series B worth $ 29 million: Spruce is managed by Scale Venture Partners and takes over the world of real estate transactions with digital tools and an API. As Danny notes, it's a huge market that could get a boost from the pandemic.
- MasterClass raises $ 100 million: Somewhere between education and entertainment, MasterClass has found its niche. The startup's annual subscription product, valued at $ 180, appears to be performing well as the company has just stacked nine-figure amounts into its checking account. What is it worth? The company would only tell Natasha that it was over $ 800 million.
- The clubhouse does it, you know? Clubhouse has happened. So we talked about it.
- SoftBank has recently lowered its earnings, giving Danny time to break out of his calculator and figure out how much money he was spending each day, and Alex to analyze the comedy that came with his slideshow. Here are our favorites from the mix. (Source materials are here.)
And in the end we asked Danny to explain what was going on with the flying tailcoat in Luckin. We believe that it is somewhere between tragedy and farce. That’s it for today, more Tuesday after vacation!